05 March 2014

Recruitment industry used as easy scapegoat, yet again

Yet again we see the recruitment agency-bashing focus of the mainstream media is alive and well in Australia.

Witness a recent a one-sided non-story in Fairfax Media’s Canberra Times entitled Public sector employment freeze proves a jobs boon for private recruiters. Writer Noel Towell decided that the new Abbott Government’s use of recruitment agencies while ordering a hiring freeze was news worth reporting.

According to Towell: ‘Private recruitment firms are reaping tens of millions of dollars from the federal government's public service cuts, supplying thousands of temporary bureaucrats, despite the hiring freeze.

The public service's workplace authority admits it is powerless to stop the bonanza with the rules of the freeze leaving departmental bosses free to dip into their budgets and pay the private sector for contract labour to fill growing gaps in the workforce.

An analysis of hundreds of government contracts signed since the Abbott government came to office show that recruitment companies have boosted the number of deals won to supply temps to federal departments. Seventeen recruitment firms have snared more than $25 million in contracts since September, mostly for ''temporary personnel services'' but also to supply specialist workers including computer programmers and for ''human resources'' consultancy services.

Are you kidding me? This is a ‘bonanza’ for the recruitment industry?

In the 2010/11 financial year, the Federal Government spent an average of $71.2 million per month on the services of ICT recruitment agencies. Using this figure as a benchmark consider the context of a five month period the $25 million in contracts referred to in Towell’s article above (assuming this spend is all contractors, not just ICT contractors). In other words, the recent monthly average recruitment agency spend is $5 million, or 93 per cent less than the monthly agency spend by the Federal Government of three years ago!

Further in Towell’s article, it is revealed that a vast majority of the contracts (14 out of 17) for one department (Geoscience Australia) were for extensions offered to existing contractors. This is just slightly embarrassing for Towell as it contradicts his main point about the supposed ‘bonanza’ for the recruitment industry.

Where was the article about the hundreds of millions of dollars that the Federal Government continues to pay the big management consulting/professional services firms (eg PWC, Deloitte, McKinsey, Accenture, etc) who make massively larger margins (in both percentage and real dollar terms) on their staff than recruitment agencies ever do?

Big consulting firms are a cosy constituency of the conservative side of politics and recruitment agencies are not regarded as being even close to the same league, although we should be, given our importance in supporting a flexible labour market.

The recruitment industry, yet again, appears to be the easy target for a lazy journalist looking to take a shot at an industry that’s done nothing more than provide staff as requested by its clients, the various Federal Government departments.

Pathetic.

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1 comment:

  1. Ross

    Enjoy your blog

    These stories are usually feed to the media by those seeking to score a political point but as the article points out the recruitment vendor contracts pretty much contain the same recruitment companies as they have for many years.

    Not sure about the federal government but both the NSW and Victorian governments have had recruitment vendor contracts since the early 1990s.

    Many public servants gain their foot in the door thanks to a short term temp role.

    And finally and quite possibly the most important point, the state and federal government recruitment vendor contracts are considerably cheaper than the centrelink Job Service Australia system (JSA).

    Its interesting to note that when the government needs staff they use a vendor contracted agency yet sends the unemployed to JSA yet not one major recruitment firm with all the networks that an unemployed person needs access too actually has a JSA contract.

    Its worst for the disabled as the system they get referred too is even less successful than JSA. I was once talking to a good friend who was a public sector recruiter at a major recruitment agency and she had never heard of the system that the disabled are referred too.

    I'm pretty sure if the Government actually sat down with the recruitment industry and worked out an arrangement, the recruitment industry would achieve results far ahead of anything the current JSA will ever achieve.

    The problem is the media tend to not really look into an issue but rather goes for the easy story which is that the government is outsourcing jobs to the recruitment industry.

    Cheers

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